Sabah mulls state tax on petroleum prod­ucts

The Star Malaysia - - Nation -

KOTA KIN­A­BALU: Sabah is mulling the idea of im­pos­ing a state tax on petroleum prod­ucts in a sim­i­lar move with Sarawak as both states seek more rev­enue in the ab­sence of an in­crease in oil roy­alty from the fed­eral govern­ment.

“We will look into that. It is def­i­nitely some­thing that can help us in­crease our rev­enue,” Chief Min­is­ter Datuk Seri Mohd Shafie Ap­dal said.

Last Mon­day, Sarawak an­nounced that it would im­pose a 5% sales tax on petroleum prod­ucts start­ing next year.

But un­like Sarawak which made known the sales tax in its tabling of the state Bud­get, Sabah did not in­clude it into its state Bud­get but did not dis­count the plan to em­u­late the Sarawak move.

“With more rev­enue, we can de­velop Sabah bet­ter and in tan­dem with the ex­pec­ta­tions of the peo­ple,” Mohd Shafie said af­ter tabling his maiden state Bud­get 2019 on Fri­day.

He said Sabah, which was one of the big­gest pro­duc­ers of oil and gas in the coun­try, must look at var­i­ous as­pects to broaden its rev­enue base.

Sarawak is ex­pect­ing to earn some RM3.9bil with the im­po­si­tion of sales tax on oil, nat­u­ral gas, liq­ue­fied nat­u­ral gas, chem­i­cal-based fer­tiliser and gas to liq­uid prod­ucts through the 5% tax next year.

The move in Sarawak comes as the prom­ise to in­crease oil roy­alty from the cur­rent 5% to 20% for Sarawak and Sabah by the Pakatan Hara­pan-led fed­eral govern­ment has yet to be re­alised. The two Bor­neo states are in­sist­ing on a 20% oil roy­alty but the fed­eral govern­ment stated that it is still work­ing out a for­mula, es­pe­cially in view of con­cerns about the coun­try’s fi­nan­cial sit­u­a­tion.

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